Cost-Benefit Analysis

Tax Glossary Definition

Cost-Benefit Analysis

Cost-benefit analysis (CBA) is a structured method used to assess the potential financial gains and losses associated with a decision or investment. It enables individuals or organizations to compare expected benefits with the costs, supporting well-informed and economically sound decisions.

Example: A taxpayer conducts a cost-benefit analysis to determine whether choosing the old tax regime with exemptions and deductions is more advantageous than opting for the new tax regime, which offers lower rates but no deductions.

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